Every business has its own goals and benchmarks that they strive to meet. You collect data to determine performance levels, to perform competitive analyses, improve response time, and make key decisions on implementing new strategies. But collecting this data isn’t enough, especially if your team doesn’t know how to make sense of it and optimize it to its fullest potential.
For many business users, data visualizations are a necessary evil for making data-driven decisions. Fortunately, there is a way to remove the negative association you may have with data visualizations, and that’s by gaining a better understanding of why they’re important and how you use them in an easy, simple way that best suits your needs.
Let’s dive in and explore how to determine the right data visualizations for any purpose your business has.
The Need for Data Visualizations
Graphs and charts draw attention to relationships and underlying trends in your data. Whether you’re creating a use case or a report to present to stakeholders, you need to communicate your data in an easy to understand, clear, and straightforward manner that your audience can interpret at a glance.
You and your team should spend time discussing and analyzing how to use the data to your advantage, not wasting resources figuring out how to read it or attempting to decipher what a complicated chart or graph is trying to tell you.
If your data isn’t presented as a quick snapshot, your visualizations are failing.
Working with numerous data sources from multiple projects can be overwhelming when the information isn’t presented in an efficient way. Data visualizations should help you to capture information, guide decision-making, and help you gain insights into what’s working for your business and what isn’t.
Fortunately, self-service business intelligence (BI) solutions, like DashboardFox, exist, and they’re designed to make your life easier and your business more efficient, not to complicate matters.
Creating data visualizations shouldn't be something a highly skilled developer has to do. And they should be simple and with the ability to change parameters as needed.
If you’re not enjoying these advantages, you need a better solution. Reading and interpreting your results should be quick and intuitive and if not, you’re using the wrong data visualizations.
The Benefits of Data Visualizations
We’ve already touched on the premise that data visualizations are essential for business decision-makers – now let’s look at some of the advantages of using them and what type of insights you can gain from them:
- Gauging the success (or failure) of products on the market
- Analyzing financial trends over time
- Backing up your case for a shift in strategy or new idea presented to stakeholders
- Identifying opportunities and highlighting potential challenges
- Capturing complex data and simplifying it for a specific purpose or use case
- Understanding relationships between variables
- Gaining control of analytics that are critical to your business’ success
Types of Data Visualizations
There is no one-size-fits-all solution when it comes to data visualizations. Different types are best suited for different purposes.
While there are hundreds of types of data visualizations available to use, there is a core group that serves the majority of your business’ needs. They are also the most familiar to most business users and are usually the most straightforward and easy to understand. Here are the handful of data visualization types that you’ll get the best use out of:
Column Graph
This type of graph is well-suited for showing comparisons over time, comparing different products or services, showing the distribution of data, and trend analysis. Example: revenue analysis.
Bar Graph
A bar graph is best used in comparing values, highlighting distribution, ranking data, showing deviations, and comparing smaller data sets (as opposed to large quantities of data). Example: rank order.
Pie Chart
Pie charts are useful in demonstrating how individual parts of data make up a whole. Use pie charts to compare percentages, where the sum of the slices equal 100%. Example: market share.
Line Graph
Line graphs are ideal for making nominal comparisons, showing progress or trends of data over a time series, identifying correlations and deviations, and highlighting relationships between data. Example: company sales.
Area Chart
This type of chart works well in situations where you want to make comparisons in your data set, identify trends, and show relationships between parts of a whole. Example: trends in multiple data points over time.
Stacked Bar Graph
Stacked bar graphs are suited for composition breakdowns where you want to examine how data parts make up a whole. Example: components of cost structure.
Other Types of Data Visualizations
While many people think that having more options is better, this isn’t the case when it comes to data visualizations.
Too many choices make it hard to know what to use and when. It’s difficult to have a solid understanding of hundreds of visualization types, whereas you can be confident in your knowledge of a smaller group that you use often.
Some of the other types of data visualizations that you might know of (or be confused by) include:
- Mekko Chart
- Bubble Chart
- Funnel Chart
- Waterfall Chart
- Heat Map
- Histogram
Complicated graphs and charts are usually unnecessary in presenting information and often get in the way of what the data is trying to communicate.
With data visualization types, less is more.
The Drawbacks of Data Visualization
Data visualizations are powerful tools that can go a long way in helping your organization thrive, but it’s not all a series of positives. Used incorrectly, data visualizations can muddy the waters and make extrapolating information confusing and difficult.
Remembering that the whole point of data visualizations is to provide a quick snapshot of data, you don’t want to lose sight of their purpose.
A great data visualization is easy to read and interpret. If you’re staring at a chart or graph and that’s not happening, then there’s a problem.
Some of the pitfalls you might find when using the wrong data visualizations are:
- Cluttered graphs and charts that don’t convey your message to stakeholders
- Unnecessary data crowding the metrics you’re looking for
- Decisions based on misleading representations of data
- Inefficient use of your team’s time and resources in creating and interpreting complicated data visualizations
- Graphs or charts that highlight information other than the data you want to focus on
Data visualizations should enhance your use case by backing up the information you’re relaying to your audience. They should solidify your arguments and aid in making your case. Any data visualizations that don’t achieve these goals waste time and resources from your team and confuse your audience.
How to Choose a Data Visualization
When determining which type of data visualization to use, you’ll want to take some time to consider several important factors. Using the descriptions of the types of basic data visualizations that we discussed earlier as a starting point, here are some other things to consider when determining how to choose a data visualization.
Ask yourself these three questions:
1. What Is Your Message?
Before you begin, it’s vital that you are crystal clear on what your over-arching message is.
Are you showing your thought leadership on a certain topic? Are you persuading your audience to take action in some way? Looking to improve sales? Deciding which trends to follow? Debating rolling out a new product or service based on your past results?
Once you’ve identified the message that you’re trying to communicate in your use case, you can begin to experiment with ideas on the type of data visualizations that you ‘ll use.
2. The Type Of Data
When you gather the data you want to use in your use case, take a look at the type of figures you have.
Is it revenue patterns from one quarter to the next? Is it the percentage of website visitors from different geographic locations? Or perhaps it’s where your company lies in market share among your competitors. Are you dealing in percentages? Time periods? Competitor’s sales figures?
As discussed, certain types of charts and graphs are better suited to certain types of data than others are. To create the most effective data visualization, you’ll want to pair your data with a format that will best serve your message.
3. What Do You Want To Show?
Another important consideration to make when deciding on the type of charts or graphs will best suit your case is to think about what you’re going to demonstrate with your data.
Are you painting a grim picture of past performance with the intent to persuade decision-makers in your organization to make changes to products or services? Are you showing success in a certain area that you’ve worked on to highlight your contributions?
Certain charts and graphs can paint the picture that you want, while others are less convincing or can make results look less significant than they are. Depending on the type of case you’re making, you will want to choose one type of data visualization over another.
The Dos and Don’ts of Choosing Data Visualizations For Your Use Case
Choosing the right data visualization can be broken down into a few easy-to-follow rules. These rules serve as a set of checks and balances to ensure you’re getting the most out of your data and help you to avoid the potential pitfalls in creating your data visualizations.
To be most effective in how you handle your data, stick to these dos and don’ts of data visualizations:
Do
- Assess the data you have before deciding on a type of chart or graph
- Think about your goals and determine why you want to create the data visualization in the first place
- Experiment with several types of data visualizations to see what works best for your particular use case
- Automate the process with BI software that allows you to create data visualizations quickly and change parameters as needed
- Ask for feedback from colleagues to gauge how they respond to your data. Are they interpreting the data quickly and easily or are your data visualizations complicated and difficult to read?
- Ask yourself if your data visualizations check all your boxes: Conveying your message? Suited to the type of data you have? Backing up the points you want to make?
- Keep your charts and graphs as simple as possible
Don’t
- Be unnecessarily flashy in your data visualizations
- Assume that everyone will interpret the data the same way that you are. As the creator of the use case, you’ll have a lot more time to analyze the data and figure out how to use it to your advantage. Remember that your audience will be seeing it with fresh eyes, so assess whether it highlights the right points for new viewers.
- Manually build data visualizations when you can automate the process with BI software
- Pile too much data into one chart or graph
- Get stubborn – you might have to make changes to your data visualizations over time or after feedback from your audience
- Assume that one type of chart or graph will work in all scenarios. Mix up your visualization types based on what works best for your data, not on what you’ve used in past cases.
Having hundreds of data visualization types available isn’t the solution to creating dynamic and convincing charts and graphs. The reality is that most data can easily, and effectively, fit into a handful of basic visualization types.
With fewer options to choose from, you can spend your time more efficiently, without the need to make sense of complicated or overly complex graphs and charts.
How Does DashboardFox Help?
We keep things simple. DashboardFox offers a carefully selected line up of graphs and charts for easy automation of your data.
We understand that not everyone is an expert in data visualizations. We also know that not everyone is tech-savvy enough to generate complex data visualizations without a little help.
Our BI solution makes handling and interpreting data simple and straightforward, so you and your team can spend more time doing your jobs and less time feeling frustrated by your data.
And creating data visualizations is just one piece of the puzzle. DashboardFox provides a self-service environment to ensure user-level security is applied to the data and that you can share it in many different methods, online, via e-mail, or downloaded in an image, MS Excel, PDF, or CSV format.
DashboardFox allows you to use your data to your best advantage, without the headache and hassle of unnecessary complexities. Reach out to our team to get started creating the perfect visualizations for your valuable data.